Dangote Upbeat on Take-off of $16bn Kenya Refinery Despite Court Ruling

Aliko Dangote, Africa’s wealthiest individual, expressed optimism about the commencement of construction on the $16 billion Lamu Refinery in Kenya, despite a court ruling postponing the affair until October 14. The resolution came following a lawsuit lodged by 133 residents of Chandavai in Lamu County who argue that the land earmarked for the refinery constitutes ancestral territory, steeped in generations of family farming.

The Malindi Environment and Land Court's decision temporarily halted endeavors such as excavation, construction, and clearing of land at the disputed site. Notably, the court did not prohibit the groundbreaking ceremony scheduled for September 30.

Dangote Group reiterated that the court ruling has not deterred the initiation of the groundbreaking, although the ruling might impact activities at the site pending its resolution. Addressing investors in Nairobi, Dangote underscored his team's readiness to face any legal hurdles, stating, "If you want to go to court to stop the Lamu Refinery, go ahead; we are ready for you."

The proposed refinery, anticipated to cost approximately $16 billion, is projected to boast a processing capacity of 700,000 barrels per day. Expected completion by 2030, the facility will convert crude sourced from Kenya's Turkana oilfields as well as other parts of Africa. This endeavor is aimed at lessening East Africa’s dependency on imported petroleum products. The legal dispute, however, has introduced uncertainty regarding the project's activities, even as the groundbreaking remains on track.

The African Energy Chamber (AEC) voiced its disapproval of the court's ruling, urging the involved parties to expedite the resolution of the land dispute to sidestep prolonged litigation from derailing the project. AEC’s Chairman, NJ Ayuk, emphasized the importance of honoring land rights and addressing legitimate concerns about compensation and environmental compliance in line with Kenyan law.

While Ayuk acknowledged that these issues shouldn’t impede the project indefinitely, he highlighted the significance of the refinery in enhancing East Africa’s fuel security. He pointed out that East Africa has been without a functional refinery since Kenya Petroleum Refineries ceased operations in 2013, with the region presently relying on imported petroleum.

Drawing parallels with the Dangote refinery in Nigeria, the AEC stressed the potential impact of the Lamu Refinery on the region, citing its role in decreasing petroleum imports and boosting the export of refined products.